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Y txt msgs mite b on ther lst lgs

Mobile operators lost out on £8.8bn last year as app-based instant messages replaced SMS. Is this the beginning of the end for text messages?

by Emma Haslett

Published: 21 Feb 2012

Last Updated: 21 Feb 2012

It’s the godfather of the emoticon, blamed for the deterioration in the nation’s spelling skills – but the humble text message may be about to fall out of favour. According to a survey by analysis firm Ovum, last year, mobile operators lost out on a cool $13.9bn (£8.8bn) as users spurned SMS in favour of instant messaging services based in apps like Whatsapp, BlackBerry Messenger or Facebook, which use phones’ internet connection to send ‘free’ messages.

Is this the end of the text message? To be honest, we doubt it: partly because that $13.9bn equates to, oooh, about 9% of all messages sent. And partly because another study, conducted last year by YouGov, found that 81% of smartphone users still reckon SMS is the best way to send mobile messages. So rumours of text messaging’s demise have been greatly exaggerated

But that’s not to say mobile operators should ignore the threat posed by instant messaging. As mobile internet gets more reliable, IM will become easier – and quicker – to use. And let’s not forget about the pay-as-you-go contingent, whose fixed data plans make internet usage cheaper than sending text messages. That applies particularly to developing economies, where pay-as-you-go is abundant.

So what can mobile operators do? Ovum says they need to ‘work together to face the challenge from major internet players’. That could be by forging alliances with the app makers themselves (Facebook might be worth investigating – a study by Allot Mobile found it had 22% of IM traffic, while Whatsapp came second with 18%). Or it could simply be by finding a way to offset their losses by coming up with clever ways to charge for data. Although we’re not sure that would go down well with Facebook Chat’s teenage fanbase…